President Donald Trump raised the prospect of slapping a 25 percent tariff on imported cars to boost domestic auto assembly, pointing to a longstanding U.S. tariff on imported pickup trucks that has helped U.S.-based automakers dominate that market.
“The reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the ‘chicken tax.”’ Trump said on Twitter Wednesday.
A 25 percent duty on imported light trucks was applied in the 1960’s by President Lyndon Johnson in retaliation to West German tariffs on U.S. poultry. It came to be known as the chicken tax. Other products were included in those American levies initially but have since been eliminated. The pickup tariff, which also applies to work vans, has remained and has been a major contributor to U.S.-automaker dominance in the domestic pickup market.
More cars would be assembled in the U.S. if the same tariff were applied on imported cars, Trump said, adding in a second tweet that “G.M. would not be closing their plants in Ohio, Michigan & Maryland.”
Trump’s tweet comes as his administration is mulling whether to apply fresh tariffs on imported autos under national security grounds, as it did on steel and aluminum imports.
On Tuesday, Trump and other administration officials said they were considering stripping subsidies to GM, such as a credit given to buyers of electric vehicles, in retaliation.
